Speculators leave oil market as regulator mulls crackdown

From MarketWatch:

Big speculators such as hedge funds and investment banks sharply reduced their buying positions in the recent week, as the futures market regulator said it's considering setting limits in energy speculation.

The drop in speculator positions likely contributed to last week's 10% slump in oil prices -- the biggest weekly loss in six months, analysts said.
Long, or buying, positions held by non-commercial traders, a category the regulator uses to classify big speculators, dropped by 16,382 contracts in the week ended July 7, according to the weekly Commitments of Traders report released by the Commodity Futures Trading Commission late Friday.
That's the biggest drop in four months in oil futures traded on the New York Mercantile Exchange, according to COT historical data. Long positions held by speculators now stand at the lowest level since the week ended May 26.
Meanwhile, speculators increased their selling, or short, positions, resulting in a 60% slump in net long positions.
Net long positions held by speculators now stand at 15,357 contracts, the lowest level since May 12. One contract represents 1,000 barrels of oil. See the latest COT
report.

The change in speculation positions came as the CFTC said, also on July 7, that it's considering setting limits in the number of positions speculators can take in the energy futures market....MORE